The True Cost of the Iraq War

Joseph Stiglitz's appreciation. Read it and you will realise that the Iraq war is pure madness. It is destructing two people, the Iraqi and the American people, and it is destabilising the region, and the wrold, for years to come...

People in the US, even though they were brainwashed to believe that the war was necessary, they overwhelmingly supported it, even electing Bush for a second term after what appeared to be a gigantic blunder. They are not to lament as much as Iraqis because this was their choice according to their own system of democracy. But what about Iraqis and other people in the Middle East who were affected by this war ? Who didn't vote and who didn't ask for it? Lebanese, Palestinians, etc..?

Those who made this war should be tried according to international law, if this law still exist...There is no way we can have our reason and our spirits back if justice, real justice, not the justice of the powerful, is not delivered...And Justice should be demanded both by Iraqis, the American people, and the rest of the world...

This is not, then, pure neocon ideology at work, says Stiglitz: "Ideology of convenience is a better description." It is an ideology illustrated even more clearly in another fact that Stiglitz can't believe - that Bush put through tax cuts while going to war. In Stiglitz and Bilmes's reading, this was downright underhand. Raising taxes, and resorting to the rhetoric of shared sacrifice used in the world wars, for example, would have made Americans more aware of exactly what the war was costing them, and would have provoked opposition sooner. The solution was to borrow the money, at interest of couple of hundred billion dollars a year, which, by 2017, will add up to another trillion dollars or so. This government will be gone in nine months; subsequent administrations, and generations, will have to pay it off.

At the same time, Stiglitz and Bilmes argue, the Federal Reserve colluded in this obfuscation, because it "kept interest rates lower than they otherwise might have been, and looked the other way as lending standards were lowered, thereby encouraging households to borrow more - and spend more." Alan Greenspan, by this account, encouraged people to take on variable-rate mortgages, even as household savings rates went negative for the first time since the Depression. Individuals were taking on unprecedented debt at the same time as a long housing bubble made them feel wealthy (and less concerned with derring-do abroad) - a scenario echoed on this side of the Atlantic.

As we now know, this couldn't continue - in part because of yet another effect of the war. Whatever the much argued reasons for bombing Baghdad, cheap oil has not been the result. In fact, the price of oil has climbed from $25 a barrel to $100 in the past five years - great for oil companies, and oil-producing countries, who, along with the contractors, are the only beneficiaries of this war, but not for anyone else. After calculations based on futures markets, Stiglitz and Bilmes conclude that a significant proportion of this rise is directly due to the disruptions and instabilities caused by Iraq. This price rise alone has cost the US, which imports about 5bn barrels a year, an extra $25bn per year; projecting to 2015 brings that number to an extra $1.6 trillion on oil alone (against which the recent $125bn stimulus package is simply, as Stiglitz puts it, "a drop in the bucket").

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Since March 29th 2006